Travellers will be offered greater discounts for online hotel bookings after an investigation by the Office for Fair Trading (OFT).

The announcement comes after the regulator investigated competition concerns that two large online travel agents (OTAs) had separate agreements with the InterContinental Hotels group, which allegedly restricted discount offers.

The OFT said Expedia and Booking.com were limited in offering room-only hotel accommodation to consumers.

It is now expected that more online firms will be able to enter the market and offer discounts.

OFT Services, Infrastructure and Public Markets Group senior director Ann Pope said: "The travel industry, fuelled by the internet, has seen significant changes in recent years, and we want to ensure those changes continue to work in consumers' interests.

"That is why we are pleased to have secured this outcome which, by allowing OTAs and hotels to offer discounts, should increase competition and mean travellers across Europe can benefit from reductions on hotel accommodation throughout the UK.

"By shopping around, people can compare the different discounts offered by hotels and OTAs, and ensure they get the best deal."

The commitments mean that all online travel agents and hotels that deal with the three investigated businesses will be able to offer discounts off headline room-only rates.

But the cheaper price offers must follow certain conditions.

Consumers must sign up to a membership scheme of an online travel agent or hotel to be able to view specific discounts, and they must make at least one non-discounted booking to be eligible for future discounts.